Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 6, Problem 23E
A (1)
To determine
Calculate the Company C’s margin of safety expressed in dollars.
A (2)
To determine
Calculate the Company C’s margin of safety expressed as a percentage of sales.
B.
To determine
To determine: the amount of actual sales (dollars).
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Margin of Safety
a. If Canace Company, with a break-even point at $631,800 of sales, has actual sales of $780,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.
1. $
2. %
b. If the margin of safety for Canace Company was 30%, fixed costs were $1,593,900, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)$
Margin of Safety
a. If Canace Company, with a break-even point at $463,600 of sales, has actual sales of $610,000, what is the margin of safety expressed (1) in dollars and (2) as a
percentage of sales? Round the percentage to the nearest whole number.
1. $
2.
%
b. If the margin of safety for Canace Company was 30 %, fixed costs were $1,236,900, and variable costs were 70% of sales, what was the amount of actual sales (dollars)?
(Hint: Determine the break-even in sales dollars first.)
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Margin of safety
a. If Kirwan Company, with a break-even point at $425,600 of sales, has actual sales of $760,000, what is the margin of safety expressed (1) in dollars and (2) as a
percentage of sales?
1. $
2.
%
b. If the margin of safety for Kirwan Company was 35%, fixed costs were $1,276,275, and variable costs were 65% of sales, what was the amount of actual sales
(dollars)? (Hint: Determine the break-even in sales dollars first.)
Chapter 6 Solutions
Managerial Accounting
Ch. 6 - Describe how total variable costs and unit...Ch. 6 - Which of the following costs would be classified...Ch. 6 - Describe how total fixed costs and unit fixed...Ch. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - What does operating leverage measure, and how is...
Ch. 6 - High-low method The manufacturing costs of...Ch. 6 - Contribution margin Waite Company sells 250,000...Ch. 6 - Prob. 3BECh. 6 - Prob. 4BECh. 6 - Prob. 5BECh. 6 - Operating leverage Haywood Co. reports the...Ch. 6 - Margin of safety Jorgensen Company has sales of...Ch. 6 - Classify Costs Following is a list of various...Ch. 6 - Identify cost graphs The following cost graphs...Ch. 6 - Identify activity bases For a major university,...Ch. 6 - Prob. 4ECh. 6 - Identify fixed and variable costs Intuit Inc....Ch. 6 - Relevant range and fixed and variable costs Child...Ch. 6 - High-low method Ziegler Inc. has decided to use...Ch. 6 - Prob. 8ECh. 6 - Contribution margin ratio Young Company budgets...Ch. 6 - Contribution margin and contribution margin ratio...Ch. 6 - Prob. 11ECh. 6 - Break-even sales Anheuser-Busch InBev SA/NV (BUD)...Ch. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Break-even analysis for a service company3 Sprint...Ch. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Prob. 22ECh. 6 - Prob. 23ECh. 6 - Prob. 24ECh. 6 - Prob. 25ECh. 6 - Classify costs Seymour Clothing Co. manufactures a...Ch. 6 - Break-even sales under present and proposed...Ch. 6 - Prob. 3PACh. 6 - Prob. 4PACh. 6 - Prob. 5PACh. 6 - Contribution margin, break-even sales,...Ch. 6 - Classify costs Cromwell Furniture Company...Ch. 6 - Prob. 2PBCh. 6 - Prob. 3PBCh. 6 - Prob. 4PBCh. 6 - Prob. 5PBCh. 6 - Contribution margin, break-even sales,...Ch. 6 - Analyze Global Airs cost-volume-profit...Ch. 6 - Prob. 2MADCh. 6 - Prob. 3MADCh. 6 - Prob. 4MADCh. 6 - Prob. 1TIFCh. 6 - Prob. 3TIFCh. 6 - Profitability strategies Somerset Inc. has...Ch. 6 - Prob. 5TIFCh. 6 - Analysis of costs for a shipping department Sales...Ch. 6 - Taylor Corporation is analyzing the cost behavior...Ch. 6 - Prob. 2CMACh. 6 - Bolger and Co. manufactures large gaskets for the...Ch. 6 - Prob. 4CMA
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- Margin of safety Jorgensen Company has sales of 380,000,000, and the break-even point in sales dollars is 323,000,000. Determine Jorgensen Companys margin of safety as a percent of current sales.arrow_forwardFaldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?arrow_forwardMargin of Safety a. If Del Rosario Company, with a break-even point at $455,000 of sales, has actual sales of $650,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. 2. % b. If the margin of safety for Del Rosario Company was 25%, fixed costs were $1,080,000, and variable costs were 75% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)arrow_forward
- Margin of Safety a. If Canace Company, with a break-even point at $223,200 of sales, has actual sales of $360,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $fill in the blank 1 2. fill in the blank 2% b. If the margin of safety for Canace Company was 20%, fixed costs were $1,044,800, and variable costs were 80% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$fill in the blank 3arrow_forwardMargin of safety a. If Kirwan Company, with a break-even point at $435,200 of sales, has actual sales of $640,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales?1. fill in the blank 1 of 2$2. fill in the blank 2 of 2% b. If the margin of safety for Kirwan Company was 25%, fixed costs were $1,203,750, and variable costs were 75% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)fill in the blank 1 of 1$arrow_forwarda. If Canace Company, with a break-even point at $661,200o of sales, has actual sales of $870,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. 208,800 V 2. 24 b. If the margin of safety for Canace Company was 35%, fixed costs were $1,845,025, and variable costs were 65% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)arrow_forward
- a. If Canace Company, with a break-even point at $671,500 of sales, has actual sales of $850,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. b. If the margin of safety for Canace Company was 30%, fixed costs were $1,436,400, and variable costs were 70% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)arrow_forwardHigh-Low Method for a Service Company Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Boston Railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved. Transportation Costs Gross-Ton Miles January $846,300 356,000 February 943,600 398,000 March 666,900 258,000 April 904,700 385,000 May 758,800 310,000 June 972,800 419,000 Determine the variable cost per gross-ton mile and the fixed cost. Variable cost (Round to two decimal places.) 2$ per gross-ton mile Total fixed costarrow_forwarda. If Kirwan Company, with a break-even point at $2,080,000 of sales, has actual sales of $3,200,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? 1. $ 2. % b. If the margin of safety for Kirwan Company was 25%, fixed costs were $1,500,000, and variable costs were 60% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $arrow_forward
- a. If Kirwan Company, with a break-even point at $459,900 of sales, has actual sales of $730,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales?1. fill in the blank 1 of 2$2. fill in the blank 2 of 2% b. If the margin of safety for Kirwan Company was 20%, fixed costs were $1,203,200, and variable costs were 80% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.)fill in the blank 1 of 1$arrow_forwardMargin of Safetyarrow_forwarda. If Canace Company, with a break-even point at $461,500 of sales, has actual sales of $710,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $fill in the blank 1 2. fill in the blank 2% b. If the margin of safety for Canace Company was 45%, fixed costs were $1,593,900, and variable costs were 55% of sales, what was the amount of actual sales (dollars)?(Hint: Determine the break-even in sales dollars first.)$fill in the blank 3arrow_forward
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